Service tax: $30 million for tourism

GAYLORD - Thirty million dollars over the next three years will be used to promote tourism in Michigan, according to Gov. Jennifer Granholm's 2008 Executive Budget.

However, a 2-percent tax on services such as golfing would be assessed to those same tourists.

Granholm's proposed 2008 budget has set aside $10 million per year for the next three years to promote tourism in Michigan, in turn boosting revenue as the state budget office expects a return in the millions in taxes from visitor spending.

The marketing campaigns will showcase the state's qualities through cable television, magazines and online marketing, and will be aimed at Midwest and national audiences.

"It's always a plus when we can better promote the area," said Patt Dobrzelewski, chair of the board of directors for the Gaylord Area Convention and Tourism Bureau. "It's definitely a win-win situation."

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She suggested that the additional monies - if they make it through the budgeting process - should be used to promote Otsego County as a four-season destination rather just a summer and winter hot spot.

As of Monday afternoon, Dobrzelewski said she had not yet been contacted by the state budget office on how the promotional monies will be appropriated.

Tacked onto the budget proposal is a suggested 2-percent tax on services such as greens fees at golf courses, which are considered by the Gaylord Area Convention & Tourism Bureau as an attractive aspect of the Gaylord area.

Paul Beachnau, executive director of the bureau, does not have an optimistic outlook on the proposed tax, known to the state's treasury department as the "Two-Penny Plan."

"It would be a terrible blow to the golf industry," said Beachnau, who believes the industry has been struggling due to statewide economic troubles. He added the cost of golf is already a barrier to those wanting to get involved in the sport.

"When the market is already in bad shape and the state imposes another cost it just creates more instability," added Beachnau. "Another fee without a benefit back to the course would be horrendously bad."

Otsego Club PGA golf professional Mark Hogan is not as worried about the tax on greens fees.

"I don't really think it'll be that big of a problem," said Hogan, believing an increase of less than two dollars on a $79 golf package will barely be noticed.

The proposed tax on services is a result of the economical shift in Michigan from the production of goods to the service industry, according to a press release from the state's budget office. If passed by the legislature the tax would take effect June 1.

Services to be taxed under proposal

Categories of services which would be taxed under the proposed taxation of services plan:

· transportation

· storage

· finance, insurance and real estate

· personal services

· business services

· automotive

· amusements

· professional services

· construction

· repair and fabrication

For a complete list of taxed services under each category as well as exempted services - which includes health care, social assistance and educational services - go to the Michigan Department of Treasury Web site at www.michigan.gov/treasury.